MUSCAT – The overall inflation rate in the GCC reached 1.8 percent in 2025, compared with 1.6 percent in 2024, remaining below the 2 percent level for the second consecutive year. The report said this reflects the effectiveness of economic policies in containing inflationary pressures and maintaining price stability.
The report noted that GCC inflation remains among the lowest globally, standing below the rates recorded in emerging and developing economies at 5.3 percent, the global average of 4.2 percent, Japan at 3.2 percent, the United States at 2.6 percent, the European Union and advanced economies at 2.5 percent each, and the Eurozone at 2.1 percent.
Inflation rates among GCC countries remained relatively similar, with the housing and miscellaneous goods and services categories serving as the main drivers of inflation in 2025. Together, the two groups accounted for about 73 percent of the overall inflation rate.
According to the report, among the main groups forming the Consumer Price Index (CPI) in GCC countries, miscellaneous goods and services recorded the highest inflation rate at 5.4 percent, followed by housing at 4 percent.
The culture and entertainment group recorded inflation of 2 percent, followed by restaurants and hotels at 1.6 percent, food and beverages at 1.2 percent, education at 1 percent, tobacco at 0.6 percent, and clothing and footwear at 0.4 percent.
Meanwhile, the health, communications and furniture groups recorded no change, while the transport group declined by 0.2 percent.
The report reviewed GCC inflation trends between 2020 and 2025, showing that inflation increased from 1.5 percent in 2020 to 2.4 percent in 2021 before reaching a peak of 3.2 percent in 2022. It then declined to 2.3 percent in 2023 and 1.6 percent in 2024, before rising slightly to 1.8 percent in 2025, reflecting relative stability compared with global trends.
Regarding inflation rates among the GCC countries’ main trading partners, the report ranked Brazil highest at 5 percent, followed by the United Kingdom at 3.9 percent, Japan at 3.2 percent, India at 2.8 percent, the United States at 2.6 percent, Germany at 2.2 percent, South Korea at 2.1 percent, Italy at 1.5 percent, and France at 0.9 percent. China recorded the lowest inflation rate at zero percent.
The report said a 2.1 percent decline in global food and beverage prices helped reduce imported inflationary pressures. However, a 15.2 percent increase in natural gas prices, along with geopolitical tensions, continues to pose risks that require close monitoring.
It concluded that the convergence of inflation rates among GCC countries and their stability below 2 percent provide a favourable foundation for strengthening Gulf economic and monetary integration. The report added that stable inflation levels give countries greater fiscal space to continue economic reforms and development spending, while highlighting the importance of harmonising statistical methodologies and improving policy preparedness to address future external pressures.
